The Audit Committee Bulletin highlights the issues that audit committee chairs of leading European companies are currently discussing with their EY advisors.

Megatrends 2014: the future of business

Six main social and economic trends will shape the business landscape in 2014. Which of these should be part of your boardroom discussions?

The amount of data created every day in 2012 will double every three years. This will force businesses to transform their models to optimize performance in the big data era.

#1. Global rebalancing: balance of economic power becoming multipolar

The distinction between “developed” and “emerging” markets will become less important as the balance of economic power becomes multipolar. By 2025–30, the per capita incomes of some emerging markets will approach parity with those in today’s advanced economies. By 2030, two-thirds of the global middle class will be Asia-Pacific residents, up from just under one-third in 2009. A new tier of emerging markets, including Turkey, Mexico, South Korea and Indonesia, will succeed the BRICs.

#2. Future of work: competition for the right talent accelerating

The gap between available skills and employers’ needs continues to grow,Workforce diversity and resolving the unemployed youth crisis will be critical to long-term growth.

#3. Digital transformation: big data era transforming business models

The amount of data created every day in 2012 will double every three years. This will force businesses to transform their models to optimize performance in the big data era. Analytics and social media reach every aspect of an enterprise, constantly posing new cybersecurity and privacy threats.

#4. Resourceful planet: driving a new cycle of cleantech

Commodities and natural resources drive roughly 10% of global GDP and underpin the performance of nearly every industry. Increasing competition for finite resources will drive a new cycle of clean technologies, energy-efficient innovation and unconventional sources of oil and gas. Energy security concerns and pricing, growing food challenges and water scarcity create new risks and opportunities..

#5. Rethinking government: collaborating with the private sector

Governments collaborate more with the private sector as they attempt to balance austerity measures with escalating citizen need. Many are undergoing tax reform to improve their revenues and increase competitiveness for investors.

#6. Reconfiguring the financial system

Implementing many major regulatory reforms simultaneously will see banks continue to struggle with the demands of compliance. The consumer protection agenda will likely stay strong. In Europe and the emerging markets, changes in bank lending are pushing companies more toward the capital markets to achieve financing.

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